Rising number of Americans are struggling to pay off their student loans

1.1 million Americans defaulted on their student loans last year, putting them at the risk of penalties.

A rising number of Americans are falling behind on their student loan repayments, while 1.1 million defaulted on their loans last year.

The figures reported by the Consumer Federation of America on Tuesday highlight the serious challenge facing graduates as they struggle to pay down the tens of thousands they still owe for their college education.

It found that millions of people had not made a payment in the past nine months on $137.4 billion worth of loans – putting their balances in default. This is a 14 percent increase from 2015.

Some 1.1 million defaulted on their federal student loans last year, which put them at risk of having their wages garnished, tax refunds seized and failing employment verification checks.

Playing a significant role in the number of defaults is that the average amount owed per federal student loan borrower was $30,650 in 2016. This is a 17 percent rise from the average at the end of 2013, when it was $26,300.

During that same period, average earnings only rose by 8.3 percent.

CFA spokesman Rohit Chopra told the Washington Post that despite a rising stock market and falling unemployment, "the economy remains very difficult for so many young people just starting out."

According to The Associated Press, analysts say students attending expensive graduate programs, state disinvestment in public higher education and an overall rise in the cost of college have contributed to the increase in the average debt owed.

By the end of 2016, 42.4 million Americans owed $1.3 trillion in federal student loans, CFA analysis of education department data shows, which doesn't take into account private student loans, credit cards and home equity loans some use to finance their higher education.

What to do if you fall behind

There are resources available for people who have fallen into default on their student loans, and the first place they should go to is the Consumer Financial Protection Bureau, which has this guide on the options available to loan defaulters.

This includes loan rehabilitation, which takes the loan out of default status provided you can make a monthly payment that is based off of how much money you make (PAYE — pay as you earn) – it can even be as low as $5 per month.

There are also standard repayment plans, which stretches your loan over a 10-year span.

As CBS News points out, there is also help in place for people who lose their jobs, go back to school or become temporarily disabled, who can have their payments put on hiatus through deferral or loan forbearance plans.

You can also go to a PAYE system and have the monthly repayment set at zero. The benefit to this is your loan is still active even if it's not being paid, which is useful if you have a loan where the outstanding balance is forgiven after 20-25 years.

There's also the possibility of refinancing, where a private lender buys your loan from federal providers and gives you a new, lower monthly payment. However, StudentLoanHero notes that in taking your loan out of federal government control you would lose most of the protections the government provides, so this is a decision that should not be taken lightly.

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